Friends,

I am excited to share that we’ve closed on a $75M Gutter Capital Fund III to continue partnering with early stage founders to build companies of consequence. We are also excited to announce that we are opening applications today for Elbow Grease II, the second iteration of our small-batch, founder-led accelerator in New York City.

The world has changed a lot since launching Gutter in 2021. Big funds have gotten bigger, writing larger checks to larger companies; more than ever, investors find comfort in consensus, funding pedigreed founders building in obvious markets. In the first quarter of this year, 75% of all venture dollars were raised by five firms. Last year, almost half of venture dollars went into rounds greater than $500M.  Consensus funds chasing consensus founders into consensus markets.

This evolution anticipates a world of kingmakers and kings.  Taken to its logical conclusion, the implications are bleak; not much room for the little guy.  However, the history of entrepreneurship tells a different story, one written by exceptionally driven outsiders obsessed with solving overlooked problems.  These are the types of founders that we’ve been lucky to partner with at Gutter over the last 5 years.

There are those in the venture community who would have you believe that the best founders don’t need help.  What a silly thing to say.  Everybody needs help! Whether or not the average investor is qualified to help build a company is another kettle of fish altogether.  We built the firm on the s

We started Gutter Capital 5-years ago with a simple hypothesis that by surrounding mission-driven founders with the right team, and helping them navigate the early pitfalls of company building, we could change the trajectory of companies that we worked with.

Over the past 5-years building Gutter Capital, we have learned that writing a check is often the least important thing we can do.  On the contrary, in a world that is flush with venture capital, the most important thing we can do for founders is to provide consistent, qualified counsel from people with experience founding, scaling, and exiting companies, and show up with solutions to their most pressing problems

Since 2021, we’ve personally recruited over 100 people into the portfolio, and introduced almost every downstream investor into our companies.  We deploy code to production, and have designed more marketing sites and fundraising decks than we’d care to admit. While it is still early days for Gutter and our companies, the evidence for our model is building, with Gutter companies 2x more likely than their peers to graduate from Seed to Series A and Series A to Series B, according to Carta Data.

Elbow Grease is an unusual accelerator.  We are not running a finishing school that prepares founders to pitch VCs.  Instead, we embed with a small handful of companies and do whatever it takes to help them build the business.  We do not invest in competitors, we are all in as long as our founders are. While Elbow Grease begins with a 10-week intensive program in New York City, we hope it is the beginning of a decades long partnership.

Beyond a $300k initial investment, founders participate in a program that is small by design and tailored to their needs.  Each company is carefully matched with an Elbow Grease Mentor; these are founders in the Gutter community who have raised beyond Series B or exited their company.  They include incredible founders like Carly Strife (Bark), Ryan Denehy (ElectricAI), Zach Garippa (Order.co) and JT White (Forerunner).  Elbow Grease founders will participate in a curriculum led by company builders, and have access to the Gutter Capital bench of Operating Partners for support in recruiting, product, design, engineering and go-to-market.

As someone who spent a lot of time thinking about offices first at Managed by Q and then at WeWork, I’m a big believer that workplace matters.  That’s why we work alongside 75 founders and operators across 15 Gutter portfolio companies at our headquarters at Gutter HQ.  In addition to Gutter Partners and Elbow Grease Mentors, founders will be parachuted into one of the most vibrant startup ecosystems in the world today.  What they make of it is entirely up to them.

Finally, we are committed to making Elbow Grease a New York institution. This town has a proud tradition of entrepreneurs from Peter Cooper, to Andrew Carnegie, to Mike Bloomberg, who left the place better than they found it.  We are lucky to build companies here, and to enjoy the full support of the civic and cultural institutions of the greatest city in the world.  It is our ambition that Elbow Grease will shape a new generation of New Yorkers who too will shape this city too.

I have said that Elbow Grease has the energy of putting on a school play.  Well the first run was a hit, so we're bringing it back. Places everybody, the show is about to begin.

With Love and Elbow Grease,Dan Teran & James Gettinger